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News Indirect Tax-GST

  • Aug 23, 2019
  • GST update: Indirect tax dispute resolution scheme notified

    The government on Thursday notified the indirect tax dispute resolution scheme which was announced in the Budget. The scheme will become operational from September 1, and will continue till December 31. “Government expects the scheme to be availed by large number of taxpayers for closing their pending disputes relating to legacy service tax and central excise cases that are now subsumed under the GST so they can focus on the GST,” the government said in a statement. The two main components of the scheme are dispute resolution and amnesty. The dispute resolution component is aimed at liquidating the legacy cases pending in litigation at various forums. The amnesty component of the scheme offers an opportunity to taxpayers to pay the outstanding tax and be free of any other consequence under the law. It provides substantial relief in tax dues for all categories of cases as well as full waiver of interest, fine and penalty. In all these cases, there would be no other liability of interest, fine or penalty. There is also a complete amnesty from prosecution.

  • Aug 21, 2019
  • Taxman to ‘vigorously pursue’ non-filers of GST

    The Central Board of Indirect Taxes & Customs (CBIC) intends to ‘vigorously pursue’ non-filers of Goods & Services Tax (GST) in a move to help boost GST collections. “I would urge all field officers to vigorously pursue with the non-filers amongst Centre’s assessees and get the due revenue deposited,” CBIC Chairman Pranab Kumar Das said in a letter to all his colleagues. His statement comes at a time when, on an average, 20 per cent assessees are not filing their returns thus impacting the revenue collection. This has been happening with both Centre’s and States’ assessees.

  • Aug 16, 2019
  • North eastern states witness over 30% growth in Apr-Jul GST collection

    North eastern states registered over 30 per cent growth in GST collection during the first four months of the current fiscal 2019-20, much more than the increase witnessed in larger manufacturing states. Growth in Goods and Services Tax (GST) collection recorded by most of the seven sister states is over three times the national average of 9 per cent.

  • Aug 12, 2019
  • GST update: Less than a fifth file returns as deadline looms

    Less than a fifth of the businesses registered for the goods and services tax (GST) as regular taxpayers have so far filed their first annual returns (for FY18) under the new system, even as the deadline for the same is this month-end. This has raised concerns over the compliance readiness of the industry, and is threatening to undermine the ability of the tax administration to plug revenue leakages which are perceived to be large. The deadline for filing the annual returns for FY18, the financial year in which the GST was launched (in July 2017), has already seen two extensions, the initial deadline being December last year. Concerned over the situation, Central Board of Indirect Taxes and Customs (CBIC) chairman Pranab Kumar Das has recently written to chiefs of field formations, urging them to help taxpayers in filing returns/reconciliation statements before the due date.

  • Aug 12, 2019
  • GST: Has CAG report taken all facts into account?

    The Comptroller and Auditor General (CAG)’s report on Goods and Services Tax (GST) has raised many concerns. But it seems that the government auditor has not taken cognisance of many facts, according to tax experts. Talking about rates, the CAG had observed that in GST, goods and services of same nature have been subjected to multiple tax rates. For example, different rates have been levied on hotels and lodges for different room rents. There is no GST for rent up to Rs. 1,000 per day, while it is 12 per cent for rent between Rs 1,000 and Rs 2,499. The rate is 18 per cent for rents of Rs 2,500 to Rs 7,499 room rents, and beyond that 28 per cent. However, the experts say, the auditor misses out the fact that this was considered by the GST Council and it had not found any justification in levying the same rate for a room in a small lodge and that in a five star hotel. The CAG, in its report, had observed that even after two years of its rollout, system validated Input Tax Credit (OTC) through ‘invoice matching’ is not in place and a non-intrusive e-tax system still remains elusive.

  • Aug 08, 2019
  • GST trouble: Businesses reporting 20 per cent revenue fall receive notices

    GST-registered businesses that have reported decline in annual revenue by 20% or more over the previous year have received a flurry of notices over the last few weeks from the tax department, sources in the know told FE. While notices related to mismatch in declaration between GSTR-3B (summary return) and GSTR-1 (outward supplies detail) were common earlier, the department is now comparing firms’ earning under GST with that of erstwhile service and excise regime.The notices have asked businesses to produce relevant documents and explain the reasons for decline in sales. The department believes that many such cases could point to possible evasion under the new indirect tax regime. Sources said that the government is sitting on a pile of data that wasn’t available to them before GST. This is further aided by integration of information from Customs and direct tax department. The GST IT system is now throwing up many red flags when tax returns under different tax regimes are compared.

  • Aug 05, 2019
  • Has National Anti-profiteering Authority outlived its utility?

    Precious little — that’s how one could describe the outcome of the National Anti-profiteering Authority (NAA) and the two layers of panels below it since they were established in November 2017. Yet, the government thought it worthwhile to extend the life of the mechanism, the stated purpose of which is to ensure consumers indeed benefit from the Goods and Services Tax’s presumed mildness, by another two years to November, 2021. The NAA has issued about 75 orders till date, detecting profiteering to the tune of `600 crore and collected almost zilch. For context, that was a negligible 0.00023% of total GST revenue reported so far. Government sources on condition of anonymity told FE said that the NAA was grossly under-performing primarily due to the ‘centralisation’ of the processes. It had ended up becoming a sinecure for officials, they added.

  • Aug 03, 2019
  • GST mop up rises marginally to Rs 1.02 lakh crore in July

    Gross GST collections stood at Rs 1.02 lakh crore in July, marginally up from the previous month, official data showed on Thursday. The July 2019 mop-up was, however, 5.8 per cent higher than the Rs 96,483 crore collected in the same month last year. Revenue collection from the Goods and Services Tax (GST) had slipped below the Rs 1 lakh crore mark for the first time in the current fiscal in June at Rs 99,939 crore. Central GST collections stood at Rs 17,912 crore, State GST Rs 25,008 crore, and Integrated GST Rs 50,612 crore (including Rs 24,246 crore collected on imports) during July this year, a statement said. It further said cess collection stood at Rs 8,551 crore (including Rs 797 crore collected on imports).

  • Aug 02, 2019
  • GST mop-up below par in July too, ask rate goes up to Rs 1.19 lakh crore

    The overall goods and services tax (GST) collections in July came in at Rs 1.02 lakh crore, a bit higher than Rs 99,939 crore collected in June, but significantly lower than Rs 1.13 lakh crore garnered in April. The average monthly GST receipts in the first four months of the fiscal year were Rs 1,04,044 crore, a good Rs 10,000 crore less than required to meet the Centre-state ‘target’ for FY20 (assuming the states get the same share as the Centre has budgeted for itself). With the shortfall in the first four months of the fiscal, the monthly ask rate for the remaining period of the year has risen to over Rs 1.19 lakh crore, a difficult task for the Centre and state governments, which are together responsible for GST administration to perform.

  • Aug 02, 2019
  • GST matters: CAG hits the nail on the head. The realities back up

    In the context of the Goods and Services Tax (GST), the art of impossible got ratified twice. First, on July 1, 2017, with its introduction and second, on May 23, 2019, with the return of the Modi sarkar, defying the global trend of governments enacting GST and losing the next immediate election. The first ever audit report on GST, tabled on July 30, acknowledged the magnitude of the tax transformation and offered constructive criticism to realise the full potential of the reform.

  • Aug 01, 2019
  • Cheque-bounce charge to attract GST, rules AAAR

    Accordingly, AAAR has upheld the ruling by the Authority by Advance Ruling (AAR). Technically speaking, the ruling by AAAR or AAR is persuasive than referral in similar matters. They are applicable only to the applicant and jurisdictional officer related with the application. However, tax policymakers use them in new circulars and notifications. Also, once such ruling is challenged in the High Court, then direction given by the Court can be used as referral in similar matters. In this case, the applicant, Bajaj Finance Limited, is in the business of auto loans against property and personal loans. The loan agreement provides for repayment of EMI or outstanding dues through cheque/ Electronic Clearing System/National Automated Clearing House, or any other electronic or clearing mandate. In case of default in repayment by way of dishonour of cheque, or any other electronic credit system, the appellant charges a fixed fee of RS. 350 as ‘bounce charges.’

  • Jul 31, 2019
  • GST system prone to input tax credit frauds: CAG

    The roll-out of GST has unified the multiple central and state taxes on goods and services to a great extent and made credit for input taxes available through the value chain, but hasn’t simplified the tax compliance regime while the experience so far has also been that of slowdown in tax revenue growth, the Comptroller and Auditor General (CAG) said. “The system of payment and settlement of tax that was envisaged for GST was based on one hundred per cent invoice-matching and availment of input tax credit (ITC), as well as settlement of I-GST on the basis of invoice-matching. Neither is possible as of now, as an invoice-matching system has not kicked-in,” the top auditor said in a report tabled in Parliament on Tuesday.

  • Jul 30, 2019
  • GST evaders beware: Risky taxpayers to be profiled to pre-empt dodging

    In a bid to pre-empt tax evasion under the Goods and Services Tax (GST), the government is looking at options to deal with taxpayers based on their risk profile. The government has been grappling with evasion through fake invoice since the GST was launched two years ago. In a bid to pre-empt tax evasion under the Goods and Services Tax (GST), the government is looking at options to deal with taxpayers based on their risk profile. Assessees identified as ‘risky’ could face restrictions on issuing invoices, utilisation of input tax credit and sanctioning of refunds. The government has been grappling with evasion through fake invoice since the GST was launched two years ago. The indirect tax department has detected such frauds worth over Rs 12,000 crore. A tax official said the rule of the thumb indicated that detected frauds were only about 10% in value of actual frauds being committed, which would take actual evasion to nearly Rs 1.2 lakh crore.

  • Jul 30, 2019
  • Delay in constitution of GST Appellate Tribunal has compelled taxpayers to file writ petitions

    GST has completed two years. GST Council has met 36 times, taken 1,064 decisions (till 34 meetings) and 1,006 decisions have been implemented, according to GST Concept and Status. As issues like rate rationalisation and return filing are getting settled, the department has started issuing demand notices in cases of non-payment and short payment of tax or irregular availment of input tax credit (ITC). Till July this year, orders in 66,067 cases have been passed, involving tax demand of Rs 4,199 crore. Taxpayers in 32,630 cases have opted to pay and the amount paid aggregates to Rs 502 crore, as per GST Council. The data indicates that roughly half of the cases where orders have been passed are not appealed further and amounts are paid. However, such amounts paid are just one-eighth of the demands confirmed against taxpayers.

  • Jul 27, 2019
  • EVs get a tax boost as GST rate slashed to 5% from 12%

    The Goods and Services Tax (GST) Council, in its 36th meeting on July 27, slashed the GST on electric vehicles (EVs) to 5 percent from 12 percent. The Council has also slashed the tax rate on EV chargers from 18 percent to 5 percent. The new rates will be effective from August 1. "Hiring of electric buses (with a carrying capacity of more than 12 passengers) by local authorities to be exempted from GST," the government said in a press release. The government has been pushing for the adoption of EVs, and manufacturers had been asking for a cut in the GST rate on electric vehicles for quite some time now.

  • Jul 26, 2019
  • Delhi HC gives relief for companies in anti-profiteering probe

    A company is required to give information to the Director-General of Anti-profiteering (DGAP) only about the ‘complained product’ and not about every product it produces, the Delhi High Court has said. A complained product refers to a product against which complaint of not passing reduction in GST rate or benefit of Input Tax Credit (ITC) is alleged. The complaint can be made by any consumer or even a tax officer can suo motu files a complaint.

  • Jul 25, 2019
  • GST council meet today to consider tax cut on electric vehicles

    The GST Council on Thursday will consider the proposal to cut tax rate on electric vehicles (EVs) to 5% from 12% currently, a move that will align with the government’s push to make non-fossil fuel transport lucrative to buyers. The Council, chaired by finance minister Nirmala Sitharaman, would meet for the 36th time via video-conferencing. The proposal to slash rates on EVs was referred to a committee of officials called ‘fitment committee’ for preparing recommendation. Apart from EVs, the fitment committee is likely to recommend concessional rates on electric chargers and hiring of EVs. A government official said that since EVs are not sold in any significant volume, the rate cut and its impact on revenue wouldn’t be a concern for the GST Council.

  • Jul 24, 2019
  • Naturopathy, Yoga, Ayurveda qualify as health care, exempt from GST

    Reiterating that services like Naturopathy, Yoga, Ayurveda fall under health care, a recent Authority of Advance Ruling (‘AAR’) verdict has provided parity among India’s traditional system of medicines and allopathy-based system. It also states that such ‘health care services’ rendered at clinical establishments by authorized medical professionals would be exempt from GST. The case came before the AAR, Goa, when Devaaya Ayurveda & Nature Cure Centre, a provider of treatment services to patients through Ayurveda, Naturopathy and Yoga wanted to know if it qualifies as a clinical establishment and whether the services provided qualify to be health care services which are exempted under Central Tax (Rate).

  • Jul 23, 2019
  • FinMin clarifies on IGST on jewellery

    The Ministry of Finance has exempted gems and jewellery taken for display at exhibitions abroad from Integrated GST. Till now, gem and jewellery taken out of India for exhibition or consignment purpose was considered as reimport when bought back into the country and IGST was levied.

  • Jul 22, 2019
  • IAF protests Rs 100 crore GST bill on import of aircraft parts

    The Indian Air Force has made a representation before the Directorate of Revenue Intelligence (DRI) to reconsider more than Rs 100 crore of integrated goods and services tax (IGST) levied on various imported items that it has shown as “parts of aircraft” in its books. The matter is likely to be taken up at the ministerial level, with both sides sticking to their points of view over a tricky taxation issue.

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